Agentic AI Accelerates Network Effects & Corporate And Customer Value

In 1980, Robert Metcalfe proposed that a single fax machine on its own is useless, but the value of many fax machines connected to one another results in a network effect that increases exponentially with faxes deployed.

While fax machines and their deployment are no longer all that interesting, Metcalfe’s core thesis is still very relevant to building valuable and scalable businesses today. For example, networking AI agents can accelerate the power of humans and machines, which in turn creates more data and insights that accelerate business and customer growth and value.

But before diving into how you can create network effects in your company using AI Agents (and not fax machines), let’s spend a minute or two on the power of flywheels- which are a form of networks, using Amazon’s well-known flywheel image:

In simple terms, Amazon’s flywheel depicts that the more users they have, the more suppliers they will attract, and the more selection will be generated. In essence, Amazon doesn’t use fax machines to create a network or network effects; instead, buyers and sellers are today’s fax machines, and they work hard to connect us to each other and their hub.

The same network-style business model has been created at Spotify, Netflix, GitHub, LinkedIn and many others. The common attribute: Buyers and sellers are today’s ‘fax machines,’ and the company is the singular hub to which all buyers and sellers are connected. The result: the larger the number of buyers and sellers, the more valuable and durable the network effects the company creates.

The advent of AI Agents

Few anticipated that these business networks of connected buyers and sellers and their related corporate flywheels would be accelerated by the advent of AI agents—automated tools that take on specific tasks. In short, AI agents:

1. Accelerate the workflow speeds of software
2. Create automated recommendations
3. Generate both real and synthetic data that drives ever-faster actions

Given the importance of the boom in AI Agents, companies have started building AI Agent marketplaces including:

And this is just the beginning.

The AI Agent-First World

Next year, AI spending will surpass a quarter of a trillion dollars. Put simply, we are quickly entering an AI-first world, and the market for AI agents is experiencing explosive growth. Its value will skyrocket from around $5.1 billion in 2024 to potentially reaching $47.1 billion by 2030—a transformative expansion that represents a critical inflection point for technology companies like Anaconda, which supports over 47 million makers worldwide who rely on open-source tools to build next-generation AI applications. Additionally, Insight Partners released a new market map that depicts the growing size and scale of the Agentic AI landscape, highlighting over 200 companies innovating across the agent stack – from foundational tools and security frameworks to sophisticated enterprise applications.

This is just the beginning.

For the world over, this isn’t just a market trend; it’s a structural shift in how business will be done, structured, and operated. As such, major players are signaling their commitment to this Agent future (to name just a few):

1. Microsoft recently announced new autonomous AI agents,
2. DWF Labs is contributing $20 million to support companies building AI agent solutions and
3. Former Google and Stripe executives recently raised $56 million to develop an AI agent operating system.

Further, these players and major institutional investors are investing significant time, money, and resources to accelerate market development, adoption, and deployment. A recent Salesforce survey found over a third of customers would rather work with an AI agent than humans, while 37% of Gen Z and Millennials prefer an AI agent for faster service than individuals. This isn’t just a technological shift—it’s a fundamental reimagining of how work will be done and by whom.

It’s no longer about Fax Machines, but it’s still about Networks.

When Robert Metcalfe created his theorem of network effects using fax machines, he demonstrated how connected networks create exponential value. Just as social networks transformed trillion-dollar companies, AI agents are now creating synthetic human connections that will accelerate interactions in ways we’re only beginning to understand. What does this mean for your company?

Here are five things to consider as you build your company’s flywheel and, with it, the network effect and data moat that creates defensibility and scalability:

1. Know your human capital network at a granular level. How many customers do you serve, and how many suppliers and partners serve you and your customers?
2. Understand the data generated in each value exchange in your business, be it between customers and your company, partners and your customers, and suppliers and either your partners or customers regardless of industry, product, or service.
3. Think about how you can use AI agents to accelerate the value of each exchange and the number of exchanges between yourself and your suppliers, customers, and partners.
4. Build a data moat that you can use to improve the value exchanged between your buyers, customers, and suppliers and upon which you can train your agents.
5. Work endlessly to reduce the friction in the value exchanged between your customers, suppliers, and partners to create value for your employees and shareholders.

Today’s world is about to be overrun by Gen AI and AI agents. The only durable advantages will be the size and scale of your supplier, partner and customer networks, the data moats you create from the knowledge derived from their exchanges, and the AI agents you insert to help both sides achieve their needs.